Former FTX Engineer Pleads Guilty To Fraud Charges

US authorities continue to file charges following the collapse of the FTX crypto exchange, after a multi-billion dollar hole was found in its balance sheet last November.

Another top executive, this time former engineering director Nishad Singh, has pleaded guilty to criminal charges in the US, Reuters reported.

Singh is now the third FTX executive to plead guilty and co-operate with the US investigation. Caroline Ellison, who was Alameda’s chief executive, and Gary Wang, who was FTX’s chief technology officer, pleaded guilty in December to seven and four criminal charges, respectively.

Image credit: FTX Arena

Guilty plea

According to Reuters, Nishad Singh admitted six criminal charges on Tuesday, which included one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States by violating campaign finance laws.

Singh also agreed to co-operate with prosecutors’ investigation into FTX founder Sam Bankman-Fried.

“I am unbelievably sorry for my role in all of this,” Singh reportedly said. He added that he knew by mid-2022 that Bankman-Fried’s hedge fund, Alameda Research, was borrowing FTX customer funds, and customers were not aware.

Singh, aged 27, said that he would forfeit proceeds from the scheme, and travelled back to the US from the Bahamas shortly after FTX imploded in November in part to assist the US investigation, prosecutor Danielle Sassoon reportedly said at Tuesday’s hearing.

“He wants to do everything he can to make things right for victims, including by assisting the government to the best of his ability,” Singh’s lawyers, Andrew Goldstein and Russell Capone, said in a statement.

Singh was released on $250,000 bond, but separately on Tuesday, the US Securities and Exchange Commission and the Commodity Futures Trading Commission filed civil lawsuits against Singh.

Singh was a close friend of Bankman-Fried’s younger brother in high school, and worked at Alameda Research and was later part of the team that established FTX.

According to court filings, he wrote the software code that allegedly gave Alameda special treatment on the FTX platform and helped Bankman-Fried backdate financial transactions to make FTX’s financial performance look better than it was.

Bankman-Fried

Singh’s guilty plea adds to the huge pressure already facing FTX founder and former CEO Sam Bankman-Fried.

Bankman-Fried, aged 30, has been under house arrest with a $250 million bond, since he pleaded not guilty in December to eight federal fraud and conspiracy charges over his role in the collapse of FTX.

Sam Bankman-Fried. Image credit: FTX

Last week Bankman-Fried was hit with four new criminal charges concerning illegal political donations and bank fraud, after it was alleged he facilitated hundreds of illegal political donations totalling tens of millions of dollars.

He now faces a total of 12 criminal charges.

Singh meanwhile became a major donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle, according to OpenSecrets.

Last month Bankman-Fried was ordered to return to a Manhattan courtroom, after it emerged he had used a virtual private network (VPN) whilst under strict house arrest.

Bankman-Fried said he used the VPN to watch the super bowl and other sporting events, but Judge Kaplan has now amended his bail conditions to include a ban on VPNs.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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